Price Transmission in the Beef Value Chain – The Case of Bloemfontein, South Africa

A. Ogundeji and F.A. Mare

No 275930, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: The large difference between the producer price of a beef carcass and the retail prices of individual beef cuts raised concerns among producers. Producers believe that they were carrying all the risk and that retailers fixed their prices, irrespective of the market price at that stage. This study examines the price transmission mechanisms in the Bloemfontein beef market using the producer price and retail prices at four retail outlets collected over a period of 3 years. It further estimates the causality links between the producer and retail prices. The traditional (Engle-Granger) and standardized (Enders & Siklos) Augmented Dickey- Fuller procedures were used to test for co-integration and asymmetry in price transmission. Four competing models, namely, Engle-Granger, Threshold Autoregressive , Momentum Threshold Autoregressive, and Momentum Consistent TAR models were applied. The following results were found: asymmetric price transmission between producer and retail prices, the results on the flow of market information indicated that a flow of market information did exist in the markets of three of the four retailers. The price transmission relationship of two of the retailers are beneficial to the consumers, as the marketing margin declined over time, while the relationship of the other two retailers are detrimental to consumers.

Keywords: Demand and Price Analysis; International Relations/Trade; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 14
Date: 2018-07
New Economics Papers: this item is included in nep-agr and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/275930/files/2434.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:275930

DOI: 10.22004/ag.econ.275930

Access Statistics for this paper

More papers in 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().